These states are terrible at hanging on to their college-bound students

Imagine if people were forced to attend college in their home state. If you’re from New Jersey, tough luck — there wouldn’t be room for 30 percent of your graduating class. New Jersey just doesn’t have that many colleges; the system would have to expand by 44 percent to accommodate everyone. This helps explain why a whopping 37 percent of students from New Jersey go to school outside of the state.

Vermont’s colleges, in contrast, have a surfeit of seats. But the state’s native sons and daughters have turned up their noses at hometown schools. Vermont has the highest rate — 45 percent — of people going to college out of state.

Overall, about a quarter of students move out of the state to attend college. This chart has the full story:

At the top of the chart are states where students like to stick around for college. In places like Utah, Arizona, and California, about 90 percent of college-bound students chose a school in their home state.

At the bottom of the chart are the unpopular states: Vermont, New Hampshire, Connecticut and New Jersey.

Vermont and New Hampshire are places where the colleges have plenty of room for matriculating students, but nobody wants to stay. If every Vermonter chose a Vermont college, the schools would still be 35 percent empty. In practice the state brings in two thirds of its college students.

Connecticut and New Jersey are also states where many students leave, but for the opposite reason. These states don’t have enough room for all the college-bound students they produce. Connecticut would have to expand its college system — public and private — by 17 percent just to give every Connecticut student a spot. In New Jersey, the most mismatched state, colleges would have to grow by 44 percent. New Jersey’s colleges are so full that only 9 percent of New Jersey college students come from out of state.

In general, though, the more college spots you have, the more your students will stay in-state. States like Utah, Arizona, Iowa and West Virginia all have large numbers of college spots compared to the number of college-bound students they graduate. These are also states where close to 90 percent students stick around.

California, Texas, and Michigan have well-regarded public university systems that have struggled to balance their own financial needs with the needs of their local students. Residents complain they are being crowded out by out-of-state students, who pay the non-resident tuition rate—often double or more.

This story is evident as well on the chart, which shows that the three states have high resident loyalty, but also slightly undersized college systems. California and Michigan would barely have enough room if all of their students wanted to attend college at home. Texas wouldn’t be able to accommodate all of them.

Why this chart matters

In the interest of developing an educated local workforce, states have increasingly been trying to keep their kids from leaving for college. One popular device is the in-state scholarship, which is awarded to students on the condition that they attend a college within the state. There has always been the in-state discount at public colleges, which is a financial incentive for students to stick around as well as an acknowledgment that their parents’ taxes help pay for the state higher education system.

There’s an implicit discount too, represented in how much states invest in their education systems. This money does not always translate into lower tuition, but also goes to increasing school quality, which attracts students.

But according to John Kennan, an economist at the University of Wisconsin at Madison, tuition discounts or increased higher-ed investment are good ways for states not only to attract college students, but also to increase the number of college graduates who end up working in the state.

The fear has always been that college students will leave the state after they graduate. Previous research has found when a state bumps up the number of college students it graduates, there is barely a difference later on in how many college-educated people are in the workforce.

Using data from the National Longitudinal Study of Youth, Kennan was able to take a closer look. He had over a decade of information on where people lived, where they went to school, tuition, where they ended up, and how much their jobs paid, among other things. He could see who moved for school, and who moved for work. On Monday, the National Bureau of Economic Research published a draft of Kennan’s report.

His conclusion is states probably don’t have much to worry about. Most students stick around for college, and most of those students then stay to work. By Kennan’s estimates, a 20 percent tuition reduction might lead to anywhere from a 2-10 percent eventual increase in the number of college graduates in the state. (Because this was an observational report, it’s hard to pin all of these effects on tuition; there may be other factors at work, like a shifting state economy.)

Since the recession, many states have balanced their budgets through higher-education cuts. Louisiana is the most dramatic example, keeping its college system afloat by shifting more and more of the costs onto students. Gov. Bobby Jindal (R) has signaled that even more cuts are to come as the state faces a $1.6 billion shortfall next year. Louisiana may have no other choice but to hike tuition even more, which would be tough on the 88 percent of students who stay for college. By Kennan’s accounting, Louisiana might be harming more than just its students; it might also be driving away a valuable section of its future workforce.

Jeff Guo is a reporter covering economics, domestic policy, and everything empirical. He's from Maryland, but outside the Beltway.